So how does one separate the bull from the bullish, and the dotcoms from the dotcons? "My advice to investors is to assess the attractiveness of the dotcom's business model and its management's ability to execute," says Chin.
He expects that some dotcoms will eventually fail due to poor execution or competition from too many players in the same market space. "A shake-out is inevitable when markets are driven by a worldwide infatuation for Internet stocks and on young startup companies. The entry of established players into the dotcom arena will also pose challenges to these startups. Market differentiation is important in an overcrowded arena--you have to have a product or service that is unique and not easily duplicated."
Azmi Ahmad, head of managed services, Skali.net, the one-stop dotcom service unit of Skali Group, suggests the reason for the many mergers and acquisitions of late could be to acquire ready experience and expertise on the cheap, rather than to take the high road of developing the dotcom in-house. "Every company these days is faced with the question of make or buy. There could be some which just want to ride on the dotcom wave, but I would like to think that the majority of the moves are backed by logical business rationale. The benefits of e-business are very high and should not be understated," he adds.
The fear of having upstart Net players strip away traditional revenue streams is a very real one. Businessmen are less skeptical of the Internet these days, and more open about Web-enabling their existing enterprises.
Adds Azmi: "The question Skali.Net faces now is not 'why should I?' but 'how to?' and for 'how much?' There are many initiatives being implemented by corporations and netpreneurs which are not publicly known since they do not get the airtime. We should see them starting to come onstream from the third quarter of 2000 onwards." Azmi does not believe the current crop of dotcom players may fold in the near future, but believes there will be some merging in the medium term.
The driving force of dotcom mania is the potential of e-commerce. By all analysts' accounts, e-commerce via government-to-business, B2B (business-to-business) and B2C (business-to-consumer) transactions is set to explode in Asia within the next five-year timeframe. Gartner Group projects that the value of B2B e-commerce in the Asia-Pacific region, excluding Japan, will jump from US$9.2 billion in 1999 to an astounding US$995.8 billion in 2004.
"Asia is behind the U.S. but could leapfrog mature economies as access shifts from PC to mobile or wireless devices," says Mark Jarvis, senior vice president of worldwide marketing at Oracle Corp. He estimates that 60 percent of the global supply chain is already in the hands of the North Asian countries of China, Taiwan, South Korea and Japan. "So the world cannot go global without the active participation of Asia. What's more, Asians are smart. They play a game of patience and adopt a wait-and-see attitude first, but jump in deeply when they see the benefits. This is already happening."
Jarvis expects more startups emerging that will copy U.S. business models. "We're likely to see more cyber-conglomerates spring up in Asia as established conglomerates either move online or start up new conglomerates to take over and cannibalize their existing ones. The motivation for the shift is the same as U.S. companies--to get better returns for their shareholders," he adds. Jarvis notes that Asia could well outrun Europe in the e-commerce race in the near future, especially if infrastructure continues to improve and the various barriers--foreign ownership limitations, online payment modes and banking restrictions--continue to be dismantled.
Oracle is a key supplier of Web-enabling software and claims that all of the top 10 B2C players and nine out of the top 10 B2B players use the Oracle platform to conduct business on the Internet. Among these are Cisco Systems, Amazon.com, Yahoo!, Excite, eBay and Looksmart.
|
